Betting terminals move hits bookmakers


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Betting terminals move hits bookmakers

  1. 1. March 19, 2014 3:15 pm Betting terminals move hits bookmakers By Roger Blitz, Leisure Industries Correspondent Bingo and betting terminals sat at polar opposites of the gambling spectrum after a Budget that provided much-needed relief for the former and punished the latter. By halving the bingo duty rate to 10 per cent, and bringing it into line with other gambling duties, George Osborne recognised the need to inject new life into what its proponents often call a soft form of gambling. Rank Group, with 97 bingo halls, immediately said the duty cut, which reduces the Exchequer’s take by £40m a year, meant it could build three new venues and save others threatened with closure. “The government has created a basis for renewed investment and innovation,” said chief executive Ian Burke. The duty cut may also revive the stalled sale of Gala Bingo’s 138 clubs. But the chancellor’s decision to raise duty on digital betting terminals from 20 per cent to 25 per cent caught bookmakers completely by surprise. Shares in William Hill, Ladbrokes and other bookmakers were hit by the chancellor’s decision. The chancellor said the so-called fixed-odds betting terminals had “proliferated” since gambling regulations were liberalised in 2005. “These machines are highly lucrative, and therefore it’s right we now raise the duty on them,” he said. Bookmakers have been more fixated on responding to persistent political concerns about the machines’ potential link to gambling addiction, which have weighed heavily on their share prices. They have been lobbying to limit any restriction on the terminals, such as increasing limits on stakes and prizes, and cautioned the government not to act until research on a potential link between machine use and gambling addiction was published in the autumn. Ladbrokes, whose shares were at one point down 8 per cent on the Budget announcement, said the industry was already paying £1bn in taxes before the increased FoBT duty.
  2. 2. “The pips are squeaking and we must surely now be given some stability to continue to support our employment and tax base while delivering for shareholders,” a spokesman said. Bookmakers face further tax pain. The chancellor said the horserace betting levy would be extended to bookmakers based offshore, and announced consultation to establish a “racing right” that would create a legally binding agreement ensuring the betting industry continued to fund the sport. The industry is already coming to terms with the new “point of consumption” tax for online gambling, which will come into effect on December 1. No rate was announced, though the industry is expecting it to be set at 15 per cent of gross profits.